Q. 7 Discusses the various forms of partnership under Islamic law?
Ans: FORMS OF PARTNERSHIP UNDER ISLAMIC LAW
There are four kinds of partnership in Islamic law:
SHIRK A T-AL-ANAN
In this partnership partners contribute their share in cash. Contribution of capital is also not equal. The profit or loss is also divided on the basis of capital amount. The liability of each partner is limited to his invested capital. This type of partnership can be formed between any two parties (Women, Children, Muslims, Non-Muslims). Generally one partner provides the major source of finance. A partner has no right to lend anything out of the joint assets of the firm.
SHIRK A T-AL-MUFA VADHA
In this partnership, each partner provides equal capital. Each partner has equal share in the profit and loss. Each partner is helper and agent of other partner. All the partners have an equal status. There is a written agreement. It cannot be formed between the slave persons.
Rights & Duties
In this partnership each partner has the right to negotiate or do any business contract on the behalf of the other partners.
SHIRK A T-AL-SANA
It is an association of different skills involved in business. Skilled persons like manager, accountants and labors provide their skill. While capitalists provide their capital. All these people join together to start the business. The profit is distributed among! them according to the terms of agreement.
SHIRK A T-AL-WAJOOH
This type of partnership is formed by agreement for the object of purchasing, goods on credit in order to supply them in the market.
One partner is an agent of another partner. The profit and loss is distributed equally. In this partnership no partner contributes any amount of capital in business.